TDS Not Showing Up? Spotting and Fixing a Tax Credit Mismatch Against Form 26AS

The Scenario

You finished your return on the e-filing portal, the employer's Form 16 Part A shows Rs 82,000 of tax deducted at source, and you confidently claimed every rupee of it. Three weeks later a Section 143(1) intimation lands in your inbox raising a demand of roughly Rs 20,000 instead of the refund you expected. Nothing in your salary changed; the gap is that your Form 26AS reflects only Rs 62,000 of TDS credit, not the Rs 82,000 your payslips totalled. This is a tax credit mismatch, and it is one of the most common reasons a clean-looking return triggers a demand or a stuck refund during the 2025 filing season.

The mechanics are unforgiving. Under the e-filing portal's View Tax Credit Mismatch utility, the system compares the TDS, TCS and challan amounts you claimed in your ITR against the amounts already credited to your PAN in Form 26AS. Where the two figures differ, the portal flags "There is a mismatch"; where they agree, it shows the credit as fully matched. The Income Tax Department's own FAQ on the facility is explicit that the tax credit allowed in your assessment is restricted to the amount reflected in Form 26AS, no matter what your Form 16 or interest certificate says. If the deductor has not deposited or correctly reported the tax, the portal does not give you the benefit of the doubt.

Statutory Answer

The right to TDS credit is not discretionary; it flows from Section 199 of the Income Tax Act 1961, which provides that tax deducted and paid to the Central Government is treated as a payment of tax on behalf of the deductee. The operational machinery sits in Rule 37BA of the Income Tax Rules 1962, which directs that credit for TDS be given for the assessment year in which the corresponding income is assessable, and on the basis of information furnished by the deductor in the TDS statement filed with the department. In plain terms: the deductor's TDS return is what populates Form 26AS, and Form 26AS is what the CPC reads when it processes your ITR. Break the chain at the deductor's end and your credit disappears even though the money left your salary.

This is why the cure is rarely a re-filing on your side first. Where the mismatch is a TDS discrepancy, the Income Tax Department's guidance is that you must approach the deductor to file a revised TDS return correcting the omission or the wrong PAN; only once the revised statement is processed does the credit appear in your 26AS. Where the mismatch sits in your own return, your remedy depends on timing. If you have not yet received an assessment intimation under Section 143(1), you can simply file a revised return under Section 139(5). For Assessment Year 2025-26 the revised-return window runs up to 31 December 2025, or before the assessment is completed, whichever is earlier. If the intimation has already issued, the correction route is a rectification request under Section 154 of the Act, filed online against that specific intimation. The two paths are not interchangeable, and choosing the wrong one wastes weeks.

Worked Resolution

Take Rohit, a salaried professional on the new tax regime for FY 2025-26 with a gross salary of Rs 14,00,000. After the standard deduction of Rs 75,000 his taxable income is Rs 13,25,000. Running that through the FY 2025-26 new-regime slabs, his tax works out as below; you can reproduce it on the Oquilia income tax calculator.

Because his taxable income exceeds Rs 12,00,000, Rohit gets no Section 87A rebate; the rebate in the new regime is Rs 60,000 only where total income stays within the Rs 12,00,000 ceiling. His employer deducted Rs 82,000 of TDS across the year, which all but settles the Rs 81,900 bill, so Rohit expected a token refund. The problem is that his employer's fourth-quarter e-TDS return understated his deduction by Rs 20,000, so Form 26AS credits only Rs 62,000. The portal restricts his allowable credit accordingly.

The fix follows the statute. Rohit first downloads his Form 26AS and the Annual Information Statement to confirm the missing quarter, a check we walk through in our guide to reading your Annual Information Statement before filing. He then writes to his employer's payroll desk asking them to file a revised TDS return for Q4 with the correct figure and PAN; the Rs 20,000 only reappears in 26AS once that revised statement is processed, typically within a few weeks. If Rohit spots the gap before any Section 143(1) intimation issues, he files a revised return under Section 139(5) after the corrected 26AS reflects the full Rs 82,000. If the intimation has already raised the Rs 20,000 demand, he instead files a Section 154 rectification request online against that intimation once 26AS is fixed, and the demand is dropped. You can pressure-test your own withholding before filing using the TDS calculator, and if you are still deciding which regime to file under, the old vs new regime comparison shows the break-even.

One discipline saves most of this pain: never claim a TDS figure your 26AS does not already show. If your tax refund hinges on credit that is not yet visible against your PAN, hold the return until the deductor corrects the statement rather than claiming optimistically and inviting a demand.

FAQ

Why does my Form 26AS show less TDS than my Form 16?

Form 16 Part A is generated from what your employer reports, but Form 26AS is populated only after the employer's quarterly e-TDS return is filed and processed under Rule 37BA. If a quarter is filed late, filed with a wrong PAN, or not filed at all, the deducted amount will not yet appear in 26AS even though your payslip shows it was withheld. Until the revised TDS statement is processed, the TDS credit the department allows is capped at the 26AS figure.

Can I claim the full TDS in my ITR and sort out the mismatch later?

You can enter it, but Section 199 read with Rule 37BA means the CPC will restrict your credit to what Form 26AS reflects, so an over-claim typically produces a Section 143(1) demand rather than a refund. The safer sequence is to get the deductor to correct the statement first, confirm the figure in 26AS, and only then claim it.

The deductor refuses to revise the TDS return. What can I do?

Keep written proof of the deduction, such as payslips and the Form 16, and raise a grievance through the e-filing portal's grievance facility quoting the deductor's TAN. The Income Tax Department can act against a deductor who has deducted but not deposited or reported tax; persistent default by a deductor is itself an offence under the Act, separate from your own assessment.

I already received a Section 143(1) intimation with a demand. Is it too late to revise?

You cannot file a revised return under Section 139(5) once the assessment is complete, but you can file a rectification request under Section 154 against that intimation. Wait until your corrected Form 26AS shows the full credit, then file the Section 154 request online so the CPC reprocesses and cancels the demand.

What is the deadline to file a revised return for AY 2025-26?

A revised return under Section 139(5) for Assessment Year 2025-26 can be filed up to 31 December 2025, or before the assessment is completed, whichever is earlier. If you miss that window, rectification under Section 154 or an updated return under the separate provisions for belated correction are the remaining routes.

Does a mismatch in TCS or advance-tax challans work the same way?

Yes. The View Tax Credit Mismatch utility compares TDS, TCS and challan-based payments alike against Form 26AS, and credit for each is restricted to the amount reflected there. For a mis-posted self-assessment or advance-tax challan, the correction is usually a challan-correction request rather than a deductor revision, but the principle that 26AS governs the allowable credit is identical.

Should I check the AIS as well as Form 26AS?

Yes. The Annual Information Statement is broader than 26AS and captures income such as interest, dividends and securities transactions that may carry their own TDS. Reconciling both before filing catches mismatches early; our walkthrough on giving AIS feedback before filing explains how to flag entries that are wrong or duplicated.